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N.J. millionaires tax: Don't use constitution as an end-run (Opinion)

1 CHARTER GORDON YEPELLO

This photo shows the New Jersey Constitution Convention held at Rutgers University in August 1947. The state constitution has been amended some 50 times since the convention was held.
(Special Collection and University Achives, Rutgers University Libraries)

Establishing tax rates by way of the Constitution is the camel poking its nose into the tent.

By Carl Golden

The frustrations of the Democratic legislative leadership are understandable. Despite holding majorities in both houses, their major initiatives have been thwarted by a governor who relishes wielding his veto power and a Republican minority united in sustaining him.

Their alternative, though — bypassing the executive by amending the state constitution to enact their policies — is misguided.

The constitution spells out the powers and authority of the branches of government, maintains their separation and establishes limits on what each is permitted to do.

It was never intended to be a backdoor mechanism to write laws. It establishes the process by which the branches function; it doesn’t dictate what that process ultimately produces.

The current constitution, nearing 70 years old, has been amended more than 50 times, ranging from legalizing casino gambling to providing for a commission to draw legislative and congressional district boundaries.

The Democrats’ suggestion to embed in the constitution a surcharge on income tax rates to be applied temporarily to a specific class of taxpayers — those earning $1 million a year or more — is an overreach.

Establishing tax rates by way of the constitution is the camel poking its nose into the tent, opening the way for any number of other issues that might be stalemated between the Legislature and the governor to be dealt with in the same fashion.

When the constitutional convention delegates crafted the document in 1947, they established a governor’s office arguably the nation’s most powerful.

At the same time, to avoid frivolous amendments, they provided a fairly arduous process for constitutional changes.

A three-fifths vote of the Legislature is required to place a proposal on the ballot and, if that number isn’t reached, it’s necessary to approve the amendment in two consecutive legislative years.

The drafters understood amendments should not be taken lightly and safeguards should exist to avoid using the process for political ends.

Should the Democratic leadership put the tax surcharge to referendum, the earliest it could appear on the ballot is November 2015. If it falls short of the three-fifths vote, the two-consecutive-years provision comes into play, delaying the question until November 2016.

Enshrining an amendment in the constitution robs the Legislature and governor of the flexibility to respond quickly to changing circumstances by either repealing or further amending — a process that could take a year or more.

If, for instance, it’s determined the surcharge is no longer necessary, those subject to it will be forced to continue to pay it until the next general election.

Those rates are locked in while lower incomes can be changed at will by an act of the Legislature, creating two distinct classes of taxpayers.

It’s possible also that a referendum to repeal or reduce the surcharge will fail in a popular vote, maintaining a level of taxation that the Legislature has concluded is no longer necessary or fair.

Perhaps the most far-reaching constitutional amendment in recent history was the one authorizing casino gaming in 1976, empowering the Legislature to permit casinos in Atlantic City and specifying the tax revenue derived be dedicated to programs for senior citizens and the disabled.

It left all other details to the Legislature.

The language was a clear understanding that including such provisions in the constitution would hamstring efforts to adapt to changing conditions in a timely fashion.

The merits of a tax surcharge are solely in the eyes of the beholder. Democratic legislators have decided the wealthy should pay more; Gov. Chris Christie has decided they shouldn’t. As long as the governor maintains support among Senate Republicans, his view will prevail.

The legislative process is often contentious, messy and frustrating. Navigating it while confronting an intransigent chief executive of the opposite party is difficult and many times futile.

It is, though, preferable to utilizing the constitution as a substitute for it.

Carl Golden is a senior contributing analyst with the William J. Hughes Center for Public Policy at the Richard Stockton College of New Jersey. An earlier version of this essay appeared on NJ Spotlight.